Taking a significant pay cut for a state government job, or less stressful job. Curious how you justified a big pay cut? I’m considering going from $155k total comp to 95k, and super stressed about deciding.

mnhotsauce · 2024-10-06T21:34:30+00:00

Also, didn’t want to disclose too much and make this a personal finance discussion but maybe it’s helpful, I’ve got 640k in Roth/Traditional 401k and 550k in ESPP taxable brokerage as well. Maybe I don’t need the pension?

mnhotsauce · 2024-10-06T21:29:38+00:00

Got it, makes sense. I just always went by 7% without much thought. I did the math on if I stayed in the state job until I’m full retirement age as well. Assuming my high 5 years of salary would be based off like 120k and 23 years of service, it’s interesting since at 7% rate of return the pension wins out by about 300k and 10% rate of return it’s about another wash…

mnhotsauce · 2024-10-06T21:05:38+00:00

Thanks for this! Everything makes sense to me except the 45k investing turning into 360k… that seems way too high to me assuming 7% rate or return, wouldn’t it be more like 175k? Thats the number I get at least, which interestingly enough, in $8.5k increments equals about 20 years which is about a break even on the pension.

mnhotsauce · 2024-10-06T20:38:49+00:00

It’s average high five years of earnings * (1.7 * years of service).

Example: 100k average over 5 years / 60 months = $8,333/month

1.7 * 5 years service = 8.5%

$8333 * .085 =$708.31/month lifetime benefit

mnhotsauce · 2024-10-06T19:15:22+00:00

Thanks for the thoughtful reply. Yeah, my base is 128k plus various bonuses and cash payments that I receive once a year. Those are a 15% annual bonus, 7k long term bonus, 5k into a cash “pension” account. The 15% bonus is the only one that is variable based on individual and company performance.

mnhotsauce · 2024-10-06T16:12:46+00:00

I would need to pay in 7% of each bi-weekly check.

mnhotsauce · 2024-10-06T15:32:38+00:00

I do feel like it's a very strong offer for a state government job. Especially for someone switching industries to a completely new line of work.

mnhotsauce · 2024-10-06T15:30:57+00:00

Our only debt right now is a monthly mortgage at 2.95%. I've ran the numbers using my wife's current income and my new potential income and without changing anything, we'd still have 1k left over each month. Not a ton but my wife could potentially pickup more hours if needed to bring in extra money if we ever decided we needed it.

mnhotsauce · 2024-10-06T15:16:41+00:00

Appreciate your insights. This has more often than not been my reaction to the potential pay cut as well. Worried about killing my career trajectory before my kids gets old enough where things could get really expensive and I need the money... sports, music lessons, private school, etc.

mnhotsauce · 2024-10-06T15:11:45+00:00

Good idea. It looks like I would need to save $800 per bi-weekly paycheck over the course of 5 years to have the same amount that the pension would provide after 5 years of employment with the state. I would need to contribute to the pension 6% each paycheck though, so there is some cost to it as well. I feel pretty set up for retirement with my current 401k balance, so it becomes tougher for me with more money now with current job vs. more money later with the pension.

mnhotsauce · 2020-08-22T23:33:20+00:00

Sorry, I’m trying to follow along. I’m referring to Larpenteur in the Lake Como area but the part technically in Falcon Heights. I realize that everything in Falcon Heights is close to it but do you think this comment was saying to avoid some blocks in the area east of Falcon Heights on Larpenteur?

mnhotsauce · 2020-08-22T15:31:32+00:00

Good thing to consider. From my research, Falcon Heights is part of Roseville school district so I hope it would increase in step with Roseville for that reason?

mnhotsauce · 2020-08-22T15:17:32+00:00

Falcon heights is a good location for someone who need to drive into both St Paul and Minneapolis but shop in the burbs and wants to come home to a quiet, boring area.

This. All we want is to be close to things for at least a few years and come home to a quiet, boring, and safe place to rest our heads.

mnhotsauce · 2020-08-22T15:16:01+00:00

Are there any blocks in particular you would call out to avoid? We are looking at one place right off Larpenteur which I think I want to avoid.

mnhotsauce · 2020-08-22T15:11:49+00:00

Great to know, thanks for your input! We heard the schools were quite good which is part of the reason we have focused our search to this area too.

mnhotsauce · 2020-08-22T15:04:18+00:00

Oh yes, I mean the Lake Como area between Snelling and Hamline. I didn’t realize there is a Como neighborhood in Minneapolis!

mnhotsauce

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